BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

State law allows for the remittance of collected mixed beverage tax proceeds to municipal and county governments, but currently only the county portion of these taxes collected within the boundaries of The Woodlands Township is remitted for local use. There is also a need for additional hotel-related economic development services to support tourism within the district. H.B. 5311, which is supported by local stakeholders, seeks to address these issues by providing for the district to be treated as an incorporated municipality with regard to the disposition of mixed beverage tax proceeds and for the creation of economic development zones by the district to increase hotel activity.

The committee substitute is a clarifying amendment from the office of the Comptroller of Public Accounts of the State of Texas that ensures there is a clear starting date for the allocation of mixed beverage tax returns starting in October 2023.

C.S.H.B. 5311 amends current law relating to the creation and operation of a development zone by and the tax revenue received by The Woodlands Township, provides authority to issue bonds, and provides authority to impose assessments and taxes.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 7, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, by adding Subsection (gg), as follows:

(gg) Requires the Town Center Improvement District of Montgomery County, Texas (district), to be treated the same in all respects as an incorporated municipality for the purposes of Section 183.051 (Mixed Beverage Tax Clearance Fund), Tax Code.

SECTION 2. Amends Section 11C, Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, by amending Subsections (b), (f), (l), (p), and (q) and adding Subsections (b-1) and (b-2), as follows:

(b) Authorizes the board of directors of the district (board), on its own motion or on receipt of a petition signed by the owners of all real property in a defined area of the district, by resolution to create, designate, describe, assign a name to, and appoint the governing body for a development zone in the district:

(1) creates this subdivision from existing text; or

(2) if the area to be designated as the development zone is composed solely of one or more hotels, to undertake one or more projects to provide supplemental advertising, promotion, or business recruitment services for the area to increase hotel activity.

Deletes existing text authorizing the board, on its own motion or on receipt of a petition signed by the owners of all real property in a defined area of the district, by resolution to create, designate, describe, assign a name to, and appoint the governing body for a development zone in the district to promote initial development or substantial redevelopment of the area if the board finds that the creation of the zone will further certain public purposes.

(b-1) Authorizes the board to create a development zone under Subsection (b) of this section if the board finds that the creation of the zone will further the public purposes of:

(1) the development and diversification of the economy of the district and the state;

(2) the elimination of unemployment or underemployment in the district and the state;

(3) the development or expansion of transportation or commerce in the district and the state; or

(4) the promotion and stimulation of business, commercial, and economic activity in the district and the state.

(b-2) Authorizes a development zone composed solely of one or more hotels to fund or provide services for the purposes for which the zone was created.

(f) Requires that a resolution designating an area as a development zone meet certain criteria, including establish a tax increment fund or project fund for the zone.

(l) Authorizes the board and the governing body each to enter into an agreement considered necessary or convenient to implement a project plan and development zone financing plan and achieve their purposes, including, for a development zone composed solely of one or more hotels, an agreement with a convention and visitors bureau within or adjacent to the district. Authorizes an agreement to meet certain criteria, including dedicating revenue from the tax increment fund or project fund to pay project costs.�

(p) Provides that certain statutes apply to the district, except that for purposes of this subsection:

(1)-(6) makes no changes to these subdivisions;

(7)-(8) makes nonsubstantive changes to these subdivisions; and

(9) a development zone composed solely of one or more hotels is required to be dissolved by the board on receipt of a petition for dissolution of the development zone signed by the owners of at least 60 percent of the assessed value of the real property in the development zone and the district is required to expressly assume the assets, powers, functions, and liabilities, and any outstanding indebtedness or obligations, of the development zone.

(q) Provides that any existing development zones that impose or assess an ad valorem or sales and use tax, rather than the existing development zones, upon certain circumstances, are dissolved and abolished and all assets, properties, indebtedness, obligations, and liabilities of the existing development zones transfer to and are assumed by the newly created and organized development zone.

SECTION 3. Provides that Section 7(gg), Chapter 289, Acts of the 73rd Legislature, Regular Session, 1993, as added by this Act, applies only to taxes remitted to the Comptroller of Public Accounts of the State of Texas (comptroller) for a calendar quarter beginning on or after October 1, 2023. Requires the comptroller to make the first transfer required by that subsection not later than January 31, 2024.

SECTION 4. Provides that all requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act have been fulfilled and accomplished.

SECTION 5. Effective date: September 1, 2023.